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| Money Metals News Alert | February 12, 2024 – Gold and silver continue to trade in range.
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Meanwhile, we've uncovered information suggesting another ugly blow up may be coming in the retail precious metals industry...
A somewhat known online bullion dealer recently had its BBB accreditation revoked amid a pattern of complaints alleging 1-3 month delivery delays, poor communication, and other service issues. (There are no reports of actual financial losses yet.)
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The retail bullion market is relatively slow at present, with inventory highly plentiful. That's also why premiums today are low compared to most of 2020-2023.
As such, there is simply no good excuse for multi-week shipping delays after a customer's payment has cleared.
Regardless of market conditions, there is NEVER a valid excuse for multi-month shipping delays.
In general, if lengthy shipping delays are occurring right now, the dealer involved is poorly managed, at best. More likely, it could be financially underwater, using new customer payments to make good on prior orders (akin to a Ponzi scheme). In such a scenario, the lower the sales volume, the longer the delays.
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We won't "name names" as to the current situation, but we once again implore metals investors to stay highly alert to the many red flags we've written about time and time again over the years.
It's important to do business with a trusted, reliable bullion dealer – while also avoiding any dealer with a pushy sales team that tries to upsell you on supposedly rare, limited-edition, proof, and other high-premium coins.
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You can certainly trust Money Metals – with our 14-year track-record as a family-owned business, A+ BBB rating, and Best Overall U.S Dealer accolades from Investopedia. We are on a mission not only to provide great value and services to our customers, but also to educate the public and policymakers about the importance of sound money.
Even if you do business elsewhere, though, PLEASE be alert for the red flags we've repeatedly outlined. It's distressing when we see people get abused or outright scammed, and it erodes public trust in our vital industry.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 89.2 to 1 | | |
| Egyptians Turning to Silver to Hedge Against Inflation | | | |
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With gold prices skyrocketing in their local currency, Egyptians are turning to silver to protect their savings and wealth from skyrocketing price inflation.
According to a Reuters report, surging prices and a weakening currency have driven the price of gold in Egyptian pounds to record high levels, pricing many Egyptians out of the market. In order to protect their wealth from currency devaluation, many are turning to silver as a more affordable alternative.
The Reuters report called the trend "a measure of an economic crisis."
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Price inflation in Egypt is running as high as 30 percent.
Meanwhile, the Egyptian central bank has allowed the pound to devalue by 50 percent in dollar terms, with more devaluation expected.
As of Jan. 30, the price of gold had risen more than 120 percent on an annual basis as demand for gold coins and bars increased by 58 percent.
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An Egyptian silver dealer called silver "the new gold."
A woman told Reuters that silver was an affordable alternative to gold. | A small 18-carat earring weighing less than a gram is more than 3,000 pounds. I can't afford that as a gift anymore so I bought a silver necklace for around 1,900. It's not the same, I know, but it still has value. | And like gold, silver also historically protects wealth from currency depreciation. The price of silver in Egyptian pounds has more than doubled in the past year.
Although about half of global demand is for industrial and technological uses, at its core, silver is a monetary metal. While the price is more volatile in the short run, silver tends to track up and down with gold over time. In fact, silver often outperforms gold in a gold bull market. This was the case during the pandemic. As gold pushed above $2,000 an ounce, a 39 percent gain, silver rallied to nearly $30 an ounce, a 147 percent increase.
The bottom line is if you are bullish on gold, you should be bullish on silver as well. If history is any indication, Egyptians pivoting to silver as a hedge against inflation and currency devaluation are making a wise move. | | |
| Silver Is Undervalued versus Gold | | |
Silver is currently significantly undervalued compared to gold.
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The gold:silver ratio of nearly 90:1 is evidence of this. That means it takes almost 90 ounces of silver to buy one ounce of gold. This is a historically wide spread.
The average gold:silver ratio in the modern era has generally ranged between 40:1 and 60:1. When the ratio widens far beyond that range, as it has in recent years, it typically returns toward that mean.
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For instance, the ratio fell to 30:1 in 2011 and below 20:1 in 1979. More recently, the ratio ranged from over 100:1 to 64:1 during the pandemic.
Silver also appears to be underpriced given the supply and demand dynamics. The Silver Institute projects silver demand will reach the second-highest level on record in 2024. This will likely lead to the third straight annual market deficit with demand outstripping supply, further cutting into silver reserves.
Silver isn't priced for that.
With silver significantly underpriced, and gold set up for a bull run when the Fed returns to its inflationary policies, Egyptians seem to be making a smart choice. And it might not be a bad idea for Americans as well. | | |
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| This copyrighted material may not be republished without express permission. Offer only available through email promotion. Offer does not apply to previous orders and may not be combined with any other offer or program. Special shipping rates or other restrictions may apply to international orders. The information presented here is for general educational purposes only. Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. While our track record is excellent, investment markets have inherent risks and there can be no assurance of future profits. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing from Money Metals, you understand our company is not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. Money Metals Exchange is not a regulated trading "exchange" as defined by the CFTC and the SEC. | | |
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